Indirect Costs

Also known as Overhead or Facilities and Administration (F&A) Costs

Indirect costs are sponsored-project related expenses that cannot be directly and accurately associated with individual projects, e.g., the costs of heat and air conditioning, electricity, building maintenance, security, libraries, administrative services, etc.  Obviously, accurately totaling all indirect costs attributable to each sponsored project would be very difficult.  Nevertheless, indirect costs are real costs to FAS and the University, and the government recognizes the University’s right to claim them as expenses related to sponsored projects.  To this end, the University and the federal government negotiate three separate rates for indirect cost reimbursement.  The rates that apply to FAS are called the “University Area” rates, and also apply to other schools in Cambridge, such as SEAS, HKS, and GSE.  The other rates are for the Medical School and the School of Public Health.

Within the “University Area” designation, there are subcategories:

  • The “Organized Research” rate is applied to most on-campus federal awards for research or instruction and training.
  • The “Other Sponsored Activities” rate is used when the grant supports a non-research activity such as a conference, summer institute, summer seminar, publication, renovation, cataloging, or curatorial project.
  • The “Off-campus” rate is applied when the majority of effort and/or activity for the sponsored project will occur off-campus, i.e. in facilities not owned by or on long-term lease to Harvard.

For the exact rates to be used and for more information about rates for non-federal sponsors, please refer to the Office for Sponsored Project’s website.

Subcontract Object Codes
In compliance with OMB costing guidance, indirects are only assessed on the first $25,000 of any one subcontract or subgrant. However, if the proposal is to a non-federal sponsor, the sponsor’s maximum published indirect cost rate must be applied to the total direct costs of the project (i.e. the full amount of the subcontract)